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LITIGATING IN THE DARK

THE 14TH STREET TUNNEL CASE


KISKA-KAJIMA v. WMATA
Presented at the 22nd FTA Construction Roundtable
Newark, NJ
May 4, 2004

WMATA SOFT-GROUND TUNNELING


BEFORE 14th STREET

WMATA SOFT-GROUND TUNNELING BEFORE 14th STREET

CIVIL ENGINEERING LANDMARK


One of 40 projects of the century recognized in November 2002 by the
American Society of Civil Engineering, along with the Hoover Dam, the
Panama Canal and the Brooklyn Bridge.

103 MILES, 83 STATIONS COMPLETED IN THREE PHASES:


Phase I: 1972-1982, 39 miles, 43 stations; $ 8B
Phase II: 1983-1992, 42 miles, 27 stations; $ 7B
Phase III: 1992-2002, 22 miles, 13 stations; $ 3B
(in 2002 $)

WMATA SOFT-GROUND TUNNELING BEFORE 14th STREET

DEWATERING LEFT UP TO CONTRACTOR


Assumed contractors more knowledgeable
Allowed flexibility during construction
Estimated costs built into bid

USED PERFORMANCE-BASED SPECIFICATIONS


2 below invert standard

WMATA SOFT-GROUND TUNNELING BEFORE 14th STREET

USED CLOSED-FACED
TUNNELING WITH ONE-PASS
LINERS
Was state-of-the-art

Thought to be faster than other


methods
Required precise tunnel guidance
Proved not to be watertight

WMATA SOFT-GROUND TUNNELING BEFORE 14th STREET

TWO-PASS LINERS OVERTOOK ONE-PASS AS STATE OF THE ART


Contractors submitted value engineering proposals
Cut mining time

Final liner over waterproof membrane resulted in dry final tunnel


However: open-faced mining was thought to permit more surface subsidence

TH
DESIGNING THE 14 STREET

TUNNELS

DESIGNING THE 14TH STREET TUNNELS

DESIGNING THE 14TH STREET TUNNELS

LAY OF THE LAND


Twin 3,200' soft-ground tunnels
with three shaft structures
Twin tangents in most shallow
ground
Urban vs. rural setting

Overhead properties, utilities

DESIGNING THE 14TH STREET TUNNELS

REASSESSED EXPERIENCE
Under-whelmed with contractorchosen ground control measures
Impressed with two-pass tunnel
construction, particularly dry final
tunnels
Could open-face two-pass method
work in an urban setting?

DESIGNING THE 14TH STREET TUNNELS

ITERATIVE DESIGN PROCESS


First TAR: one-pass approach with closed-face machine
WMATA: reconsider two-pass open-face
Second TAR: still one-pass with closed-face
WMATA: reconsider all ground control methods
Third TAR: two-pass with open-face possible if
install grout canopy
contractor performs extensive dewatering

DESIGNING THE 14TH STREET TUNNELS

ITERATIVE DESIGN PROCESS


WMATA required design contractor to make recommendation
Letter recommended two-pass with grout canopy and extensive dewatering
Dewatering design
Computer modeling called for over 300 wells
Human experience estimated 60 wells

DESIGNING THE 14TH STREET TUNNELS

OBSERVATIONAL DEWATERING
SYSTEM
60 initial wells
Complete shafts
Observe draw-down for 90 days
Additional wells as needed by unit
price

DESIGNING THE 14TH STREET TUNNELS

DEWATERING SPECIFICATION
warned that contractor may encounter water during excavation:
The designed dewatering system may not eliminate all groundwater from the
tunnel excavation.
mixture of initial design criteria and performance standards

DESIGNING THE 14TH STREET TUNNELS

DEWATERING SPECIFICATION (continued)


For mined earth tunnels, additional wells beyond the specified minimum
dewatering system may be required to effectively reduce hydrostatic pressure and
control groundwater in soil surrounding each tunnel in order to prevent the
following:
Heaving of the invert, blowups, hazardous seepage and sudden loss of soil in
tunnel face.
Loss of ground and surface subsidence.
Maintain groundwater 2' below invert.

DESIGNING THE 14TH STREET TUNNELS

GEOTECHNICAL REPORT
Advantages and disadvantages of tunneling methods considered
Reasons for choice of two-pass open-face
Anticipated ground conditions
Because of concerns about the difficulties of effectively dewatering the
[excavation], the contractor is required to pre-support the ground...
[T]here are no assurances that, even with fairly extensive dewatering, i.e.
closely spaced ejector wells, face stability problems can be entirely
eliminated...

DESIGNING THE 14TH STREET TUNNELS

DISPUTES CLAUSE
Disputes Review Board (DRB)
Contracting Officer final decision

Board of Contract Appeals

BIDDING AND PERFORMANCE

BIDDING THE CONTRACT

SEALED BID METHOD

WINNING BIDDER: KISKA-KAJIMA


Joint venture of two experienced tunnel contractors

Both new to DC area


Award amount: $42.9 million including estimated quantity items and safety
incentive
Immediately submitted VECP - closed-face mining with one-pass liners

PERFORMANCE HIGHLIGHTS

SLOW START-UP

OBSERVATIONAL SYSTEM NOT


FOLLOWED

DIFFICULTIES PREPARING AND


MAINTAINING MINING EQUIPMENT

WMATA GEOLOGIST MAPS TUNNEL


FACE

EXTENSIVE SURFACE SUBSIDENCE


DETECTION EQUIPMENT

LITIGATION
U.S. District
Court

U.S. Court of
Appeals

United States
Supreme Court

LITIGATION
U.S. DISTRICT COURT
DISTRICT OF COLUMBIA

U.S. DISTRICT COURT

DEMANDED $44 MILLION ON FIVE CLAIM THEORIES


Including fraud and breach of contract
All outside the contract

DEMANDED TRIAL BY JURY

NEW TO WMATA
Never accused of fraud before
Never tried contract case before jury or in District Court

U.S. DISTRICT COURT

WMATAS MOTION TO DISMISS


For failure to exhaust contract remedies
Dressed-up contract claims

KiSKA-Kajima argued that it had no remedy through contract disputes provisions


Court considered for six months, and sided with KiSKA-Kajima

U.S. DISTRICT COURT

NO CONSIDERATION BY DRB OR BOARD OF CONTRACT APPEALS


Panel expertise
Project knowledge; construction knowledge

STRATEGY CHANGES
Less detail
WMATA must file motions aimed at eliminating claims
Exhibits must tell story
Witnesses

HIRED OUTSIDE FIRM AS LEAD COUNSEL

U.S. DISTRICT COURT

DISCOVERY
Approximately one year
Thousands of documents
Dozens of depositions

E.G. DOCUMENTS
Superseded tunnel alternative reports
Letter from design team: worried about liability during construction
Edited geotechnical report
300-well estimate

U.S. DISTRICT COURT

MOTIONS TO ELIMINATE MISPRESENTATION CLAIMS SOVEREIGN


IMMUNITY
Sovereign Immunity without consent, state cannot be sued
WMATA has not consented to non-contract suits related to discretionary decisions
One type of discretionary decision: Design
Example: Noise level of trains
Example: Omitted steel beam
Court agreed that decisions regarding mining, dewatering and other construction
methods were protected by design immunity
Misrepresentation counts thrown out
Hollow victory: KiSKA-Kajima permitted to bring all of the same evidence in
support of remaining claims

U.S. DISTRICT COURT

MOTIONS TO EXCLUDE CERTAIN EVIDENCE


Example: Dewatering specification
KiSKA-Kajima argued 2 feet below invert was a guarantee for dry mining
conditions
WMATA argued that read as a whole, specifications warned that mining could
encounter wet conditions
Court held that it was ambiguous and jury should determine its meaning

LITIGATION - U.S. DISTRICT COURT


TRIAL

TRIAL

JURY IMPANELED
8 members, plus 4 alternates
The passing of juror no. 2

CORPORATE REPRESENTATIVE
Contractor choose assistant project manager for 14th Street
WMATA choose assistant project manager for entire Mid-E line

TRIAL

BATTLE OF THEMES
Contractors theme: WMATA purposefully duped innocent contractor into
underbidding contract through massive conspiracy involving designers, their
subcontractors and hundreds of WMATA employees
WMATAs theme: Experienced tunnel contractors agreed to build tunnels for $42
million and now want another $44 million

TRIAL

TECHNOLOGY COURTROOM
Both paper and electronic exhibits could be displayed and manipulated
Large-flat panel screen plus small displays for judge, attorneys and jury
Real-time transcript
KiSKA-Kajima took full advantage of, including 3D animation
WMATA chose lower-tech. approach

TRIAL

TRIAL BEGAN JANUARY 22, 2001 KEY WITNESSES


KiSKA-Kajima key witnesses were managers and experts
WMATAs key witnesses were field personnel and managers

CLOSING ARGUMENTS FEBRUARY 20

VERDICT DELIVERED MARCH 5


Unanimous verdict

MOTION FOR NEW TRIAL DENIED

LITIGATION FIRST APPEAL


U.S. COURT OF APPEALS
FOR THE D.C. CIRCUIT

U.S. COURT OF APPEALS

D.C. CIRCUIT IS ONE OF THIRTEEN CIRCUITS NATIONALLY

FIRST APPEAL IS A MATTER OF RIGHT

KISKA-KAJIMA HIRED KEN STARR


Recognized it was futile to argue jury verdict was incorrect
Concentrated on courts legal decisions: granting motions dismissing claims and
leaving interpretation of dewatering specification up to jury

U.S. COURT OF APPEALS

REVIEWED DISTRICT COURTS DECISION DISMISSING


MISREPRESENTATION CLAIMS
KiSKA-Kajima: design immunity does not permit misrepresentation
WMATA: design immunity includes choosing methods of construction
Court
Issue not design but what WMATA chose to put into contract
Found new type of immunity: immunity to decide what to include in contract

U.S. COURT OF APPEALS

REVIEWED TRIAL COURTS DECISION THAT JURY SHOULD INTERPRET


AMBIGIOUS DEWATERING SPECIFICATION
Parties agreed that District Court was wrong
KiSKA-Kajima argued that once District Court found provision ambiguous it should
have been read against WMATA
WMATA argued that District Court should not have found provision ambiguous
Court: patently ambiguous
So obviously ambiguous that KiSKA-Kajima had duty to inquire
Because KiSKA-Kajima failed to inquire, provision read in WMATAs favor
Had KiSKA-Kajima won this issue, they could have argued
WMATA breached contract by definition
Jury clearly mistaken in finding no breach
Entitled to new trial

LITIGATION SECOND APPEAL


UNITED STATES
SUPREME COURT

U.S. SUPREME COURT

SUPREME COURT REVIEW IS DISCRETIONARY


Must petition for right to have case heard
Few petitions granted; statistics from 2002-03 term:
8,255 new cases
Only 84 reached argument
If petition granted, further briefs on the merits are filed, followed by oral argument
Decisions on merits typically published toward end of session in May

U.S. SUPREME COURT

PETITION MUST ESTABLISH REASON FOR COURT TO GRANT REVIEW


Conflict between circuits
Issue of national import

Not enough: wrong decision

U.S. SUPREME COURT

KISKA-KAJIMAS PETITION
Because circuits in agreement on WMATAs sovereign immunity, KiSKA-Kajima
had to argue there was an issue of national import
KiSKA-Kajima argued that WMATAs sovereign immunity was too broad
If Supreme Court did not overturn decades of caselaw, all compact agencies
could continue using immunity against public interest
Because other compact agencies involved, issue one of national import

U.S. SUPREME COURT

WMATA COULD HAVE DECLINED OPPORTUNITY TO FILE OPPOSITION


Advantage: sends message that respondent does not believe there is any reason
for court to grant the petition
Disadvantage: though court will typically request briefing from respondent if they
are seriously considering granting certiorari, there are no guarantees

WMATA ELECTED TO FILE MINIMAL BRIEF IN OPPOSITION


Waiver - KiSKA-Kajima had not previously made argument that caselaw was
wrong and therefore should not be able to raise it now

KISKA-KAJIMA FILED BRIEF REPLY

U.S. SUPREME COURT

MOTION FOR LEAVE TO FILE AMICUS BRIEF


Amicus friend-of-the-court, a brief in support of one side
General Contractors Association of New York
Must request permission of the parties to the case before filing
WMATA did not grant permission
GC Assoc. had to motion Court for permission to file

YES, THE SUPREME COURT DOES HAVE A SENSE OF HUMOR


Issued decision by granting motion to file amicus, but denying petition
No briefs on the merits; no oral argument

LESSONS LEARNED

LESSONS LEARNED

DO NOT MIX PERFORMANCE-BASED AND DESIGN TYPE SPECS


Lest owner be held to high performance standards

DESIGN DATA
Include and incorporate appropriate data and opinions into contract
Highlight that information in contract is not complete
State in contract that contractors are encouraged to seek the additional
information available in project library, and make library materials as available as
possible
Include superseded opinion matter in library, appropriately labeled

LESSONS LEARNED

DISTRICT COURT LITIGATION


Lengthy
Costly
Claims that would be easily dismissed by review boards or administrative boards
are more likely to get serious consideration
Juries smarter than expected

AT TRIAL, HE WITH THE EASIEST-TO-FOLLOW STORY WINS

LITIGATING IN THE DARK


THE 14TH STREET TUNNEL CASE
KISKA-KAJIMA v. WMATA
Presented by:
Phillip T. Staub
Assistant General Counsel, WMATA
600 Fifth St., N.W.
Washington, D.C. 20001
(202) 962-2555
pstaub@wmata.com